PIRATES AND THE DIGITAL POLICE:
Songwriting, publishing, production and distribution in Y2K
Part IV -
Piracy is the deliberate infringement of copyright where unauthorized
duplication of an original recording is used for commercial gain.
Pirated recordings often use different packaging and offer compilations
or collections of artists and/or genres. Counterfeits are attempts
to duplicate a recording in a way indistinguishable from the original.
Bootlegs are unauthorized recordings of live or broadcast recordings,
which are then duplicated and sold.
to the Music Industry
Music piracy cost the music industry worldwide an estimated US$5
billion in 1997. Piracy on the Internet has become a major concern,
with an estimated 80,000 illegal music files (MP3
files) available on 2,000 sites in over 30 countries. Half of these
sites originate in the United States, with Sweden, the Netherlands
the UK and many other Asian, Eastern European and South American
countries following close behind.
of industry organizations are leading the way in the fight against
piracy. International Federation of Phonogram Industry (IFPI)
Director-General Nic Garnett says piracy is the biggest threat to
the recording industry and he blames such blatant illegally obtained
revenues on weak legislation and unprotected technologies all over
the world. Songwriters must not leave the legal work to industry
organizations and should be aware of and support industry efforts
to stop piracy, improve worldwide copyright legislation and support
the development of more secure encryption methods while promoting
In the interests of securing copyrights, new technologies are currently
being explored by the industry. This includes embedded signals or
watermarks, multiple encryption, "lost" decryption keys, Internet
authorization flags for licensed transmissions and even the means
of auto-scanning the Net for unauthorized music transmissions.
the legislative front, world piracy and the digital transfer of
music has copyright legal reps scurrying about the world armed with
a plethora of amendments to numerous copyright bills, declarations,
treaties and congressional acts. All of this legal maneuvering is
really about the protection of intellectual property, namely, the
work of songwriters. When youre on the verge of writing the next
number one hit, its hard to take the time and preview the seemingly
boring subject of copyright. But when your song eventually reaches
number one, and some thoughtful rec exec informs you that hundreds
of thousands of copies of your single were illegally counterfeited
in just one foreign land alone, you are suddenly going to realize
that substantial income due you is going into the pockets of 21st
world of copyright is a big one, and anyone seeking the latest developments
and copyright initiatives would do well to start with the United
States Copyright Office. Led by such organizations as the RIAA,
the IFPI, ASCAP
and the NMPA/HFA with support
from such companies as Intel Corp., Sony
Corp., Hitachi Ltd., Matsushita Electric Industrial Co. Ltd. and
Toshiba Corp., these companies and organizations have joined forces
with the Copyright Office to produce an encoding standard expected
to protect digitally distributed music and videos.
of copyright initiatives are currently in the works. There are numerous
bills before Congress seeking further protection and expansion on
the of the 1976 Copyright Law. The Audio Home Recording Act of 1992
already allows coded information preventing second generation copies,
and provisions in the National Information Infrastructure (NII)
bill have recently been submitted
to Congress that will extend those provisions by laying the groundwork
for copyright management systems and prohibiting equipment designed
to circumvent those systems.
International mechanical royalty rate agreements, like the one recently
signed by IFPI and BIEM
will continue to impact writers and authors on an international
level. The IFPI represents
some 1,300 record producers in over 70 countries around the world,
including the majors (BMG, EMI
Music, PolyGram, Sony Music,
International and Warner Music).
IFPI campaigns for the
introduction, improvement and enforcement of copyright and related
rights legislation and co-ordinates the music industrys anti-piracy
(Bureau International des socits grant les droits dEnregistrement
et de reproduction Mcanique) represents 39 licensing organizations
in 37 countries.
by the IFPI, the international
music industry will continue to pressure the European Union (as
well as all other regions around the world) to reduce the value
added tax (called VAT) on sound recordings, ratify world trade treaties,
help stop piracy in nations belonging to the EU, and add new copyright
laws to protect online transmission.
In October of 1998, President Clinton signed into law the Digital
Millennium Copyright Act which put into effect the World Intellectual
Property Organization (WIPO)
treaties. WIPO initiated a compulsory
licensing fee for webcasters, but still requires amendments to numerous
The Recording Industry Association of America (RIAA)
is a trade association whose member companies create, manufacture
and/or distribute over 90% of the legitimate sound recordings produced
and sold in the United States. The RIAA
is broadly similar to the British Phonographic Industry (BPI), the
record producers trade association in the United Kingdom.
the RIAA took action against
a company called AudioNet. AudioNet maintained a website called
AudioNet Juke Box. Over 400 full-length albums were being unlawfully
made available for downloading by anyone. A number of major record
labels joined RIAA as co-plaintiffs
in three separate lawsuits. The RIAA
alleged that the sites violated Federal copyright laws introduced
into the Copyright Act 1976 by the Digital Performances Right and
Sound Recordings Act 1995.
is estimated that at least 85% of the records released in the United
States do not recover production costs. Income is generated from
the remaining 15% and this income is used to develop new writers
and artists. Most of the pirated titles from the Internet are taken
from the 15% figure. In the United Kingdom, the band Oasis recently
threatened legal action against a number of their fan sites because
of unauthorized offerings of downloadable samples of the bands
1976 US Copyright Act did not recognize performance rights on sound
recordings. In conjunction with the Copyright Office, the RIAA
and others are calling for amendments to the Digital Performances
Right Sound Recordings Act 1995 and other acts to extend performance
rights to all sound recordings. This includes the use of sound recordings
in the re-transmission of radio broadcasts over the Internet.
In December, 1998, recording industry and technology leaders from
around the world announced in a press release a collective initiative
for establishing the Secure Digital Music Initiative (SDMI). The
SDMI is a specification that will protect copyrights of music in
all existing and new digital formats and all means of digital transfer
and distribution. The SDMI Forum (a consortium of digital music
companies) believes the initiative will allow consumers easy access
to recordings, increase copyright protection and promote better
communication and business between the technology and music industries.
SDMI Forum consists of a virtual whos who in the music business:
Strauss Zelnick, president and CEO of BMG
Entertainment; Ken Berry, president of EMI
Recorded Music; Thomas D. Mottola, chairman and CEO of Sony
Music Entertainment; Doug Morris, chairman and CEO of Universal
Music Group; Bob Daly, chairman and co-CEO, Warner Bros. and Warner
Music Group; Terry Semel, chairman and co-CEO of Warner Bros.
and Warner Music Group; Hilary
Rosen, president and CEO of the Recording Industry Association of
America; and Jason Berman, chairman-elect and chief executive of
the International Federation of the Phonographic Industry. Berman
also represented the Recording Industry Association of Japan. Many
independent labels are behind the initiative as well.
biggest names in hi-tech are also involved: AOL, AT&T, IBM, Lucent,
Matsushita, Microsoft, RealNetworks,
Sony Corporation and Toshiba,
Aris Technologies, Diamond Multimedia, Headspace, Iomega, Liquid
Audio, Samsung and Texas
Instruments, and many other smaller companies.
Spearheaded by Edward P. Murphy, Chairman of the International Copyright
Coalition (ICC) and head of the National Music Publishers Association/Harry
Fox Agency (NMPA/HFA), a resolution
was unanimously adopted at a recent MIDEM
annual meeting by delegates from numerous organizations representing
the most significant copyright markets from around the world. The
resolution calls for international compliance with the World Intellectual
Property Organization Copyright Treaty (WIPO).
The ICC is a coalition of creators, copyright holders and organizations
whose purposes include support for protection of copyright in the
digital age, and the encouragement of the use of licensed music
in all digital media.
The Harry Fox Agency, Inc. (HFA), The licensing arm of NMPA,
and America Online Inc. entered into a licensing agreement in 1998.
HFA entered into the agreement as licensing agent for its publisher
principals. The agreement allows certain uses of musical compositions
created by AOL members in musical instrument digital interface ("MIDI")
format, including the uploading and downloading of songs to and
from AOL forum libraries.
America Online Inc., based in Dulles, Virginia, is the worlds leader
in branded interactive services and content. AOL operates two worldwide
Internet online services: AOL, with more than 11 million members;
and CompuServe, with more than 2 million members. AOL also operates
AOL Studios, the worlds leading creator of original interactive
content. AOL.com is the worlds most accessed Web site from home.
AOL Instant Messenger allows instant communication with all Internet
users. AOL NetFind is a comprehensive guide to the Internet.
The Harry Fox Agency, Inc. (HFA) is a wholly owned subsidiary of
the National Music Publishers Association, Inc. (NMPA),
the principal trade association representing an estimated 18,000
music publishers in the United States. HFA issues mechanical recording
licenses and handles other licensing activities. Established in
1927, HFA also serves as an information source, clearinghouse and
monitoring service for a large percentage of music used in the United
States and around the world. HFAI is a special purpose subsidiary
of The Harry Fox Agency, Inc., established in 1993. NMPA
supports and initiates worldwide compliance with WIPO
treaties, copyright term extension, setting statutory mechanical
royalty rates, lobbying for intellectual property rights and against
piracy in the digital age.
Introduced by a consortium of composers, publishers and copyright
societies in 1995, the ISWC (International Standard Work Code) is
a worldwide method of identifying musical compositions (songs, symphonies,
jingles, TV theme songs, etc.).
There are several standard numbers already in use worldwide. The
EAN/UPC (European Article Number/Universal Product Code) appears
as a barcode on CDs, cassettes, and videos. The ISRC (International
Standard Recording Code) identifies individual sound recordings
which make up the different tracks on each CD or cassette. The ISMN
(International Standard Music Number) identifies editions of printed
music. The CAE (Compositeur, Auteur, Editeur) identifies the creators
and publishers of music.
The ISWC is different from other codes because it identifies the
musical composition itself, not the composer, sound recording, or
the printed music. A song might be recorded several times, and each
recording has its own ISRC, but the song itself has only one ISWC.
with a ISWC can be identified, protected, administered, and exploited
in a much more efficient way than ever before. This will bring many
practical benefits to composers, authors, publishers, users, and
their societies around the world. The ISWC also reduces errors and
administrative costs of many organizations, simplifies registration,
licensing, tracking, and distribution of royalties. There are some
one billion possible ISWCs. Unused numbers are held in a "bank"
by the International ISWC Agency.
Started in 1914, the American Society of Composers, Authors and
Publishers (ASCAP) claims to
be the worlds largest music performing-rights and royalty collection
organization. ASCAP represents
over 68,000 composers, lyricists and music publishers. Broadcast
Music, Inc. (BMI) was
founded in 1940 representing artists and writers from "hillbilly"
and "race" music, now known as country and R&B and the roots of
rock & roll. It claims a membership of more than 200,000 writers
and publishers with a database of 3,000,000,000 copyrighted works.
Just exactly which of the two organizations is the largest remains
debatable--both organizations figures range widely over the years.
There are other performing rights organizations worldwide.
and Online Monitoring Services, the leader in intellectual property
monitoring for the Internet, recently announced a joint partnership
offering a software technology called EZ-SeekerTM. This software
is designed to license and track music performances on the Internet.
BMI recently announced MusicBot
which use proprietary Web scanning technology to ferret out illegal
audio-visual distribution sites. EZ-SeekerTM also has the ability
to decode various watermarks that may be employed by record labels,
music producers and distributors to identify their works.
1998, ASCAP formed an alliance
with Liquid Audio, a top
developer of on-line music-delivery systems. ASCAP
also signed a licensing deal with Minneapolis-based Net
Radio Corp., and its co-venture partner, AudioNet, of Dallas.
Both Web services use RealAudio
technology to bring audio content to the Web. Net
Radio offers mainly music, while AudioNet offers talk and sports.
Net Radio is the first company
to offer live music 24 hours a day on the Internet.
Special 301 of the US trade law, TRIPS under the GATT
agreement, WIPO, ISRC and other
initiatives are briefly reviewed below.
Under United States trade law, Special 301 is one such means of
filtering out nations that fail to cooperate with international
copyright agreements and treaties. This instrument may subject various
countries to investigations and possibly even sanctions.
Related Intellectual Property Agreements (TRIPS)
Under the GATT agreement, TRIPS
are another tool providing further protection and enforcement of
copyright. This compliance program has already closed certain loopholes
that allowed countries like Luxembourg, San Marino, Australia and
Italy to hide bigtime bootleggers. The piracy of back-catalog recordings
in Japan is also a major focus as well as legal reforms in heavily
pirated countries like Ireland and Korea.
Industries and Trade
The core copyright industries (including recorded music, film and
TV) contributed $60.18 billion in foreign sales and exports to the
United States balance of trade. This figure surpasses even such
mainstay export sectors as the automotive, agriculture and aircraft
Intellectual Property Organization (WIPO)
The European Unions 1997 release of their Copyright Directive still
fails to meet the standards of the WIPO
treaties. Numerous other countries are still undergoing ratification
of the WIPO treaties and this
will continue well into Y2K.
Standard Recording Code
Under the administration of the RIAA,
the International Standard Recording Code (ISRC) is currently being
developed as a means for identifying sound and music video recordings.
Each sound recording will have its own unique number, identifiable
no matter how or where the recording is transferred via digital
means. The ISRC will co-exist with the UPC system. Remixes, edits,
new versions of tracks, tracks with changed playing times, partially
used tracks, and fully re-mastered tracks (tracks with fully restored
sound qualities) will all be coded. In addition, many CD manufacturing
plants stamp their products with a SID code unique to every individual
CD plant mold used to manufacture CDs. CD-R recording devices are
also under close scrutiny. How all these codes will interface remains
to be seen, but its certain that serious efforts are being made
to stop the pirates of the new millennium (sounds like a movie title).
Other developing copyright management system technologies include
embedded signaling, encryption and IEEE 1394.
Embedded signaling systems, or watermarks, are buried in audio and
not heard by the listener. This system can identify the music and
control and regulate unauthorized copying and transmissions of recordings.
The embedded signal cannot be removed even if the digital recording
is converted to analog, compressed or broadcasted. Encryption "keys"
and other data are also buried in the signal so consumer electronic
devices, computers and network equipment can automatically detect
Encryption is a method designed to protect movies and music by scrambling
content that can only be descrambled with the right software. Encryption
technology will have no effect on television sets, PCS, set-top
boxes, digital VCRs and digital video disk (DVD) players.
IEEE 1394 is a new proposal that protects transmissions by setting
a standard for digital devices to talk to other digital devices.
A number of proposals to protect content in the course of transmissions
are presently being evaluated.
IBM has developed a device allowing for secure electronic distribution
called the Cryptolope. Cryptolope stands for "encrypted envelope,"
a phrase describing the Cryptolopes operation. The user receives
an envelope containing data, but the data is encrypted. Without
an encryption key, only a description of the content is available.
Intelligent Agents are a new way for publishers to reach targeted
groups of customers. Intelligent agents are used to build large
mailing lists while allowing for organization by musical interest.
One new product is called Firefly.
uses artificial intelligence to project what a user will like based
on what the user currently likes. Firefly
allows for a online, interactive catalogue. The idea of the intelligent
agent is already in use at two major commercial sites on the Web.
The bookseller Amazon (www.amazon.com)
offers a list of four or five other books that readers might wish
to purchase in addition to the one being selected. Barnes & Noble
(www.barnesandnoble.com) have allegedly implemented the Firefly
Audio Liquid Audio uses sophisticated
multi-layer encryption and state-of-the-art water marking technology
that binds downloaded music to an individual consumer and identifies
the copyright owner of the musical content. The rights of content
owners are further protected through the inclusion on all tracks
of an inaudible digital watermark which contains ISRC codes, copyright
information and other user defined data. Liquid
Audio provides complete performance reports for the performing
rights societies including song title, artist name, duration, the
number of times streaming was initiated, the total streaming time
for the song and the average streaming time for each listen.
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